As insurers well know, the cost of non-compliance is steep.
Now National Union Fire Insurance Co. (NUFIC) of Pittsburgh, a member of AIG's Chartis Group, is intimately familiar with such consequences, having agreed to pay the California Department of Insurance (CDI) nearly $6 million in penalties for violating fair business practices.
The products covered under the settlement include group and blanket limited benefit plans, supplemental accident and disability policies, and accident and disability coverage provided with travel insurance policies.
According to California Insurance Commissioner Dave Jones, insurance regulators cited a number of improper practices and violations, including delays and errors in processing claims, product limitations not explained clearly, failure to use properly licensed professionals to sell insurance products, and failure to fulfill and administer policies after sale, among others. As a result of these violations, the California Department of Insurance (CDI) participated in a multi-state insurance regulators investigation and enforcement action against NUFIC.
“This sends an important message to insurers about the cost of not complying with laws and regulations designed to protect consumers,” Jones said in a press release.
The settlement agreement includes a required two-year monitoring period with an implementation audit performed by insurance regulators and a series of other audits and reports by the insurance company to ensure compliance. The agreement includes provisions for an additional $21 million in penalties, should the company fail to comply with any of the stipulated conditions.
Under California law, the $5,991,132.37 penalty payment collected by the CDI was deposited in the General Fund of the State of California.
Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader
Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
- Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
